Editor | Wu Says Blockchain

In this episode, we had an in-depth conversation with Chris Yin, co-founder and CEO of Plume Network, discussing how Plume tokenizes real-world assets (RWAs) through its unique RWAfi platform. Chris elaborated on the challenges and opportunities faced in the process of tokenizing real-world assets and explained how Plume combines traditional finance with crypto-native principles to drive the development of RWAfi. He also shared Plume's future prospects in the decentralized finance (DeFi) space.

The audio recording was generated by GPT, so there may be some errors. Please listen to the full podcast:

Xiaoyuzhou:

https://www.xiaoyuzhoufm.com/episodes/670fd9560d2f24f289a50db6

YouTube:

https://youtu.be/9wjEs9DNL_Y

Introduction to Plume Network and RWAfi

Ehan: Welcome to the Wu Says Blockchain podcast. Today, we are very pleased to invite Chris Yin, founder and CEO of Plume Network. Chris, welcome, please introduce yourself and Plume.

Chris: Thank you for the invitation. I am Chris, one of the co-founders and the CEO of Plume. We have built a blockchain, network, and ecosystem focused on real-world assets (RWAs), presenting our new vision for RWAs, which we call RWAfi.

A brief background: We have been working in this field for over a year. We have three co-founders, and this project was initiated by us together. Prior to this, I was the founder of a company, sold my first company, my second company went public successfully, and my third company raised $50 million and is still operating. I have known my co-founders for a long time, and we explored multiple ideas together, ultimately getting very excited about the potential of RWAs and deciding to focus on RWAfi to make these RWAs truly useful for crypto users, bringing real yields and real use cases through on-chain.

Currently, we have over 180 projects building on Plume, and there are over $1 billion in assets deployed on Plume, with hundreds of millions more set to go on-chain.

Additionally, we recently concluded a two-month testing campaign, during which we had over 3.75 million active wallets and conducted over 270 million on-chain transactions. Overall, the progress has been very smooth, and more content is on the way. I am excited to share more about our work at Plume today.

How Plume Leverages Key Partnerships to Drive RWA and Data Availability

Ehan: What notable partnerships does Plume currently have?

Chris: Yes, we have engaged in many different collaborations. We view Plume as an open and neutral ecosystem and enjoy working with many different participants. In certain areas, we work closely with the Arbitrum team to support and run our chain within their ecosystem. Since we are an EVM chain, our collaboration with Arbitrum is very close.

Additionally, we have a close partnership with Celestia regarding data availability. Our data availability layer is supported by Celestia, helping to reduce transaction costs and ensure a good user experience.

Of course, we have also collaborated with several RWA protocols, including Centrifuge. One of our investors is one of the founders of Centrifuge. We also work with the RWA.xyz team. Therefore, we have established many partnerships in RWA projects and infrastructure projects, and there has been significant progress in this area.

Challenges of Traditional RWAs and Plume's Solutions

Ehan: Can you explain what real-world asset finance (RWAfi) is and how it integrates with DeFi principles?

Chris: Certainly. In simple terms, RWAs have historically seemed very boring and static to us, and they are not well-suited for most crypto users.

Our team comes from diverse backgrounds. For example, my co-founder Teddy worked at Coinbase and has experience with BNB Chain. Eugene has worked on crypto platforms like Robinhood and dYdX, while I have been an entrepreneur and venture capitalist for many years. We approach this market from the perspective of crypto-native users, whereas many existing RWA projects are built on traditional finance principles.

One issue we see is that previous RWA projects did not generate much trading volume or attention because they were designed for a traditional finance (TradFi) audience. However, the on-chain audience is primarily crypto-native, and the products and experiences they seek are very different from what TradFi products offer.

We start from the perspective of building what crypto users truly need, which means real yields and real use cases. We design products and businesses around making RWAs more useful for crypto users, which is what we refer to as RWAfi.

Key principles of the crypto world—liquidity, composability, and permissionless environments—are very important. In DeFi, you own your assets, can transfer them freely, and even use them as collateral. You can engage in various strategies, such as re-collateralization or looping, because these assets are programmable and open.

We are applying these principles to RWAs, meaning users should be able to enter the ecosystem, hold tokens representing real assets, and start earning stable, secure yields—potentially in the range of 5%, 10%, 15%, or even 20%. Additionally, these assets should remain liquid, so if you want to sell or exchange them, you can do so at any time without permission.

The second key point is to make these assets composable within the DeFi ecosystem. If you want to exchange RWAs for something else, you can trade them on decentralized exchanges (Dex). If you want to use them as collateral for a loan, you can do that too. While earning yields, you can also engage in other DeFi strategies, such as leveraging or speculating on other assets.

Therefore, the concept of RWAfi is not just about putting RWAs on-chain; it is also about integrating the traditional and crypto-native worlds, following what users are already doing. People have already been using RWAs and crypto assets together, often without realizing it. The most common example of using real-world assets in the crypto world is stablecoins. Stablecoins already exist, and people use them for various purposes.

The problem is that many RWA projects do not know how to create a user experience similar to stablecoins—simple, easy to use, and catering to crypto-native users. When you design products with these users in mind, you discover tremendous growth potential. We aim to bring real products to those focused on earning stable yields while giving them market exposure to tokens.

If the market goes up, users can turn to more speculative assets. If the market performs poorly, they can turn to yield-bearing assets. If they wish, they can even speculate on yield-bearing assets as collateral. Our goal is to combine these two worlds, giving users the flexibility to continue doing what they are already doing—mixing real-world assets with crypto assets.

Innovations in Tokenizing Real-World Assets (RWAfi)

Ehan: So, what unique opportunities does RWAfi offer that traditional DeFi platforms cannot?

Chris: There are primarily two areas of opportunity. The first is real yields. Most DeFi products today focus on what we call "endogenous yields," meaning yields are generated and passed within a closed-loop system. This is also why DeFi yields fluctuate daily—they depend on the state of the system at any given moment. The value of the tokens can also change significantly, so even if you see a 20% annual yield (APY), it may not be sustainable in the long term. A year later, that 20% might just be a temporary peak, while the token's value could decline or fluctuate dramatically.

This is how DeFi yields work. They are not bad; they are just different. RWAfi allows us to derive real yields from off-chain assets and bring that capital into the crypto ecosystem. Users can earn competitive annual yields (APY) through stablecoins like USDC, USDT, or USD. It is important to note that a 2-3% yield is not enough—you need meaningful yields to make this model attractive. The benefit of RWAfi is that you can still participate in DeFi while earning real yields, which is a significant advantage.

The second opportunity lies in bringing real assets, real capital, and real cash flows from the off-chain world into the crypto ecosystem. By introducing new capital, we are expanding the scale of the crypto space every day. Moreover, when you bring in assets that are closer to reality, you attract a wider variety of users, increasing user engagement.

We have already seen this process unfold with stablecoins. Initially, the use case for stablecoins was in the DeFi space, simplifying trading and providing a stable asset for exchange or holding, reducing volatility. Then, stablecoins allowed global users to hold dollars, expanding their appeal. Finally, institutions began to participate, recognizing the advantages of stablecoins in cross-border payments, fast settlements, and other financial products.

RWAfi is also following a similar path. We start with DeFi and crypto-native principles, expanding the ecosystem by introducing more yield opportunities. As the ecosystem grows, those familiar with these products will want to access them, driving greater institutional adoption. We are laying the groundwork by first catering to DeFi and crypto-native audiences, then further scaling through real users and real yields, attracting more institutions to join.

Institutional Adoption and Asset Tokenization

Ehan: As DeFi and other financial systems continue to grow, what role do you think traditional financial institutions will play in the next phase of Plume's development?

Chris: I think there are mainly two aspects. We are very fortunate to witness the rise and growth of institutional participation in this cycle, largely due to the development of BTC ETFs and institutions like BlackRock and Larry Fink deploying significant capital on-chain. They are starting to tokenize and bring a wide range of products on-chain. As institutions finally begin to build actual products in this space, we are seeing a lot of excitement. For example, Franklin Templeton has launched their products, BlackRock has its Bitcoin ETF, and Winston Tree and VanEck are also working on similar projects. These large institutions are indeed starting to take action on-chain.

However, this will take time. Everyone thinks that as soon as BlackRock or Larry Fink mentions tokenization and starts tokenizing some products on Ethereum, everything will happen overnight. But that is not the case. It is a process that indeed requires time.

Our perspective is simple: we want to show institutions how to use crypto technology in a way that benefits both them and the entire ecosystem. We maintain regular contact with these institutions to discuss how to view crypto technology not just as a tool for cost savings, such as in fund management or business management—this is a common narrative in blockchain—but as a network. Crypto is a network composed of users, capital, and protocols that can collaboratively build entirely new products and services, and importantly, it can create new revenue opportunities.

Currently, institutions are in the exploratory phase. They have shifted their focus from private, permissioned chains to public chains. It is very exciting to see Larry Fink and BlackRock deploying products on Ethereum, and we are also seeing more and more institutional participation. Over time, I expect we will see institutions paying more attention to composability, growth, and building networks around these tokenized assets.

As the saying goes, a day may seem long, but years can be very short. We are still in the early stages of deployment, but once institutional users and on-chain assets reach a critical scale, things will truly accelerate and take off.

Asset Classes and Yield Opportunities on Plume

Ehan: Plume recently mentioned managing $1.25 billion in assets. Can you share what types of real-world assets have been tokenized by Plume so far?

Chris: Yes, of course. We recently announced our first wave of assets, which, as you mentioned, have a total value of over $1 billion deployed on Plume. As I mentioned earlier, there are currently over 180 protocols building on Plume, and these assets cover a variety of categories. Since we are an open and permissionless chain, unlike many other RWA projects that are restricted, many protocols collaborate with us.

These protocols can be roughly divided into three categories. The first is collectibles, including sneakers, Pokémon cards, watches, wine, and art. The second category is alternative assets, such as private credit, real estate, or green energy projects. The third category is financial instruments, such as stocks or corporate bonds. Therefore, we are tokenizing a wide range of asset classes.

For us, the focus is not on the type of asset but on the use cases. In the crypto space, people care less about the assets themselves and more about what they can do with them. We focus our efforts on the three key use cases that matter most to crypto users: yield generation, trading, and speculation.

Our first $1.25 billion in tokenized assets is primarily concentrated in the yield generation category. These assets are designed to be very secure, stable, and provide high yields. To make yield farming effective, these assets need to be liquid, composable, and permissionless. For example, we have corporate bonds that offer yields of 8-10%, sometimes even up to 15%.

We also have solar farms—real, operational facilities that have long-term contracts (40-year agreements) with governments, schools, or hospitals, generating stable yields of 10-15%. Additionally, we have oil wells that generate income through continuous extraction, providing yields of 10-20%, and they are very stable investments because they are energy-related and belong to high-quality investment-grade projects.

We first focus on showcasing use cases with real on-chain yields while minimizing risks. Over time, we will introduce assets with higher potential yields, but we believe it is crucial to first introduce stable and secure products.

If you have idle funds, allocating them to these areas is an obvious choice, allowing you to earn real yields while continuing to participate in DeFi and other activities within the crypto ecosystem.

Success Stories and Deployment of Real-World Assets on Plume

Ehan: As you continue to refine the actual uses of these assets, Plume has achieved significant success in the tokenization of real-world assets. Can you share some success stories or examples of investors and businesses tokenizing assets through your platform?

Chris: Absolutely, 100%. We collaborate with many different types of protocols. Since Plume is specifically built for RWAs and RWAfi, we are able to create the most user-friendly platform for two main goals: 1) to bring physical or synthetic assets on-chain for tokenization, and 2) to make these assets useful. This is why we have a strong user base and a project ecosystem on the platform.

For example, we can look at the issue from both the asset side and the project side. We developed a product called Plume Arc, which allows us to go deeper than most protocols.

Most RWA projects typically ask, "Which chain should we use?" But the more important question is, "How do we bring this asset on-chain?" Most general-purpose blockchains and ecosystems do not have the tools needed to make this process seamless, so we developed these tools and integrated them into the chain. This provides projects with a very consistent and smooth experience.

For example, Mineral Vault is one of our protocols. They had not been on-chain before and had discussions with platforms like Securitize. But what they really needed was a full-stack solution for distribution and liquidity. They needed a platform to tokenize their assets, distribute those assets, and connect with a community and ecosystem that could make those assets useful. When they found us, their first funding was about $100 million, but they planned to tokenize over $1 billion in assets. If they had chosen other platforms, the costs would have been higher. We shortened a process that would have taken months to just a few weeks.

Another example is a solar project. They have a large portfolio of green energy assets, primarily solar power plants. Before finding us, they had tried to launch in another ecosystem and received full support from that chain, but the tokenization process was very difficult. After going live, they realized that although the ecosystem had ample liquidity, trading, and users, they did not attract any new users or capital.

In contrast, when they came to Plume, within just two weeks, they generated over 350,000 transactions through our community, gained over 100,000 unique users, and raised funds through our ecosystem. They were able to build and trade efficiently.

This is what sets us apart from other platforms. We focus on RWAs and RWAfi, and we have built a community that combines protocols, users, and liquidity to make these assets truly useful. Therefore, many projects may initially try other platforms but ultimately come to Plume. This approach allows us to grow our ecosystem to over 180 protocols and countless users because we centralize everything in one place, focusing on a unified use case and RWAfi narrative.

How Plume Selects Assets Suitable for Tokenization

Ehan: So, how does Plume decide which real-world assets are suitable for tokenization?

Chris: There are actually two main aspects. First and foremost, we are an open and permissionless chain. We do not make choices for people; anyone can build anything on Plume. We do not stop people from innovating. We want this to be an open platform where anyone can freely build and drive development without restrictions. This is our first principle.

Secondly, in which areas do we invest more marketing efforts? In which fields do we spend more time and energy bringing assets on-chain? This all goes back to use cases, rather than the assets themselves. As I mentioned earlier, the three key areas we focus on are yield generation, trading, and speculation. We consider which types of assets fit these categories and which might be more appealing to our community and audience.

For example, in the yield farming category, people want safe, stable real yields. They want assets to be liquid, composable, and scalable. That is why the types of assets we bring typically have these characteristics. For instance, solar farms are a straightforward asset. There are no construction risks or operational risks because they are already built. The only thing left is to collect the electricity fees. So, we like assets like this.

Similarly, assets like oil wells generate stable cash flows once extracted. While oil prices may fluctuate, the wells themselves provide a stable and secure source of income. These are the types of assets we prefer.

On the other hand, in the trading and speculation category, we prefer assets that already have secondary markets. Sneakers, Pokémon cards, sports cards—these are all markets worth billions today. About 80% of sneakers are purchased for resale, which is a speculative limited-supply market similar to NFTs.

The problem with these assets is that they have slow turnover. If you buy sneakers for speculation, you have to wait for them to be delivered, store them, and then wait for the right moment to resell. This process can be cumbersome.

Through Plume, we can simplify this process by centralizing these assets in one place. Users can shop, hold assets, and then sell them later, or use them as collateral for loans while waiting for prices to rise. Alternatively, they can use synthetic versions of the assets to speculate on prices. This speeds up the process, brings new liquidity, and improves market efficiency.

For example, one of our protocols collaborates with a large secondary sneaker store, so every user visiting that store automatically becomes part of this protocol.

We focus on two things: bringing real yields through yield-bearing assets and introducing real users through existing markets to expand the use cases of the crypto ecosystem and RWAs. This is our strategy. But again, Plume is an open platform, and we encourage everyone to bring their assets on-chain. You never know where the next innovation or great use case will come from, so we want to make it easy for anyone to get started.

Innovations to Enhance Returns on Tokenized RWAs

Ehan: What innovations has Plume introduced to enhance or guarantee returns on tokenized RWAs?

Chris: Yes, there are certainly several key points. For us, the key is to build a full-stack ecosystem around asset selection, bringing assets on-chain, and structuring them in a way that is easy to understand and use. Many projects may format assets in a way that makes them illiquid or overly restrictive when bringing them on-chain, such as requiring KYC, setting 3-5 year lock-up periods, or only offering low yields of 3-5%.

But because we control the entire chain from start to finish, we can shape the products early in the process. When we first talk to asset managers who want to go on-chain, we help them design protocols and assets to ensure they are usable when they go live on Plume. This means they are composable, liquid, permissionless, and formatted in a way that meets user needs from day one. Sometimes it is better to use NFTs, sometimes tokens, or you might want to combine assets with others to reduce risk and increase yields.

We built protocols like Plume Arc and Nest to simplify this process. These innovations allow us to properly format assets and distribute these products correctly through Nest. You can choose to manage a single asset or create an index that combines multiple assets. This process increases yields, reduces risks, and enhances liquidity. It also allows you to create new asset combinations and mix them according to your needs, creating new asset pools or indices.

When you do this, two things happen: the liquidity of the assets increases, yields improve, and risks decrease. Additionally, many of these assets are incentivized by the protocol itself and Plume.

The infrastructure we built allows users to easily allocate capital to real-world assets, earn yields, and withdraw at any time when needed. This is the innovation we bring to ensure that this process is simple and straightforward. We also implement tools and safeguards to help users select the right assets, ensuring they can maximize their yields.

User Engagement and Tools for Interacting with Tokenized RWAs

Ehan: What actions can users take on the Plume platform to engage with RWAs? Are there specific features or tools that empower users to interact with these tokenized assets?

Chris: Absolutely. Our view of RWAfi and RWAs is similar to our view of stablecoins. The success of stablecoins largely stems from the fact that users do not need to learn anything new. It operates the same way as any other crypto asset—it is open, composable, and liquid. You can buy and convert it into USDC or USDT at any time, and there is ample liquidity. These assets are fully compatible with various ecosystems and projects.

We structure Plume and the projects and assets on our network to ensure a similarly seamless experience. Whether the asset is crypto-native or real-world, users should be able to use it in exactly the same way.

The actions users can take are very straightforward. You should be able to mint assets and purchase them just like minting NFTs or tokens in the crypto world. The only difference is that you are minting a real-world asset. You should also be able to exchange these assets in a decentralized manner and trade them at any time.

Additionally, you can use these assets for other common DeFi activities. For example, you should be able to put these assets into lending markets and apply for loans. You can use the loans for other purposes or engage in more complex DeFi strategies, such as recycling these yield-bearing assets. If you recycle yield-bearing assets, you can elevate yields from stablecoins of 10-20% to 40-50% by leveraging.

Finally, you can also use these assets for speculation. You can enter the perpetual contract market, use the assets as collateral, and apply for leveraged positions. These are the actions users can take when interacting with RWAs on Plume, and the overall design experience of the system is no different from using regular crypto assets.

Users do not need to know whether the asset is crypto-native or real-world. They only need to ask some basic questions: What is the source of the yield? Is it real? Is the asset stable? These questions are the same as those for any other crypto project.

Chris: Historically, RWAs have progressed slowly, with low trading volumes and adoption rates due to user experience barriers. They have not met the expectations of crypto-native users. By removing these barriers, we ensure that crypto users do not need to learn anything new. The operations are the same, the use cases are the same—the only difference is that RWAs provide real yields. But ultimately, the user experience should be as smooth as any other crypto project.

Addressing Regulatory Challenges and Ensuring Compliance

Ehan: How does Plume address the complex regulatory environment when tokenizing real-world assets?

Chris: This is a great question. Regulation is definitely an important factor, and our approach is based on flexibility and modular design. There are many different regions—whether in Asia, the Middle East, or the United States—each with its own regulatory frameworks and requirements.

First, we designed Plume to be modular, allowing us to adapt to best practices in each region. For example, we partnered with a company called Texture, which enables us to leverage their broker-dealer license. This allows us to trade regulated assets, which is one way to address these challenges.

Regulation is a complex and costly process, but through partnerships, we can simplify this process and add value. Both we and our partners benefit from this, and ultimately, the end users do as well. In different regions—whether in Asia, the Middle East, or elsewhere—we rely on strong partnerships to ensure we can easily adapt to various regulatory regimes, whether by changing licenses or using different protocols.

There are two operational modes on Plume. If you want to operate in a fully regulated manner, we have built the necessary tools and integrations that allow asset issuers to create permissioned protocols that only allow specific types of users or trading on regulated exchanges. If access restrictions are needed, this is easy to implement. On the other hand, we have also built an open, friendly, permissionless ecosystem. So, if you prefer a crypto-native approach without heavy regulation, you can do that as well.

We balance these two approaches in the same environment. Not all assets need to be regulated. For example, items like sneakers, cards, or watches typically do not require regulation. We do not want to exclude these assets, and we want to support various types of assets operating on the same network. This creates network density and provides greater flexibility and utility.

To achieve this, we rely on modular partnerships, and we have built a lot of infrastructure ourselves. For example, we have transfer agent licenses, but to act quickly and ensure broad regulatory coverage, we rely on a partner ecosystem rather than doing everything in-house. This way, we can efficiently address the complex regulatory environment while creating value for all participants.

Security Measures for Tokenizing Physical and Digital Assets

Ehan: What security measures does Plume take to ensure the safety and integrity of both the digital and physical aspects of tokenized assets?

Chris: That’s a good question. We focus on two key areas to ensure the security of tokenized and digital assets. Let me give you two examples.

The first use case involves the tokenization of physical assets—such as sneakers or collectible cards—where we store the physical assets in secure locations and mint a tokenized version of the asset on-chain. In these cases, we ensure that asset issuers collaborate with highly trusted and established institutions. For example, we work with large warehouses and highly secure storage facilities. These places securely store the physical assets, and every time the asset is accessed—whether opening a door or triggering a lock—a notification is sent on-chain to inform everyone of the asset's status. This ensures the security and transparency of the physical assets.

Another example is yield-bearing assets, such as solar farms. To ensure security and transparency, we can integrate directly with solar equipment. We can track and display the amount of sunlight collected, the electricity generated, and map this data directly to smart contracts. This way, users can accurately see how much electricity has been generated and how much yield they have earned, achieving real-time transparency and security.

If you simply store sneakers at home and mint NFTs based on them, that is far less trustworthy than collaborating with a secure institution like Brinks warehouse—Brinks is a well-known brand in the storage and warehousing field. These trusted institutions can provide transparency for the proof of reserves for the assets, greatly enhancing credibility.

For digital assets, we partner with top custodians to ensure security. Depending on the region, we work with companies like Anchorage, Fireblocks, and BitGo. This ensures that digital assets and tokenized assets are stored in highly secure and trusted environments, guaranteeing the safety of the assets in both physical and digital aspects.

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